Despite pause, U.S. tariffs leave furniture, cabinet makers 'in dire straits': industry association
CBC
The Canadian Kitchen Cabinet Association says while it welcomes U.S. President Donald Trump's postponement of tariff increases on furniture, cabinets and vanities, the industry is still being devastated by the duties.
Trump hit the sector with 25 per cent tariffs in October but paused a promised increase to a total of 30 per cent for upholstered furniture and to 50 per cent for cabinets and vanities that was set to take effect Jan. 1.
"Yes, 50 per cent is a relief. But our industry is still reeling from the 25 per cent," said Luke Elias, the association's vice-president.
"You just can't mitigate that in the manufacturing environment overnight."
Kitchen cabinet manufacturing is a $4.7-billion industry in Canada and Elias said the sector exports about $600 million worth of product annually. Trump's tariffs delivered another blow to an industry already dealing with a soft Canadian housing market, he added.
Manitoba-based Elias Woodwork employs more than 400 people and exports about 80 per cent of its product to the United States. Company president Ralph Fehr said the 25 per cent tariffs are damaging but a 50 per cent duty would have been catastrophic.
"Who in the U.S. would want to pay that much extra for Canadian content?" he said. "I just don't think that would have worked out real well."
Fehr said his company uses American materials — such as hardwood lumber from the Appalachians — and turns them into finished products it then sells to customers in the United States.
Fehr said Ottawa espoused the virtues of exporting to the United States for decades and he's spent 45 years building a business based on that model.
"We're kind of hoping they go to bat for us and try to come to some agreement."
Fehr said the tariffs have taken all of the profit out of his business. For now, his company is looking to reduce costs and streamline to weather the storm.
The industry has seen layoffs since Trump's tariffs were implemented in October, said Elias (who, despite his surname, is not connected to Elias Woodwork). Industry meetings in December saw multiple companies warn that job losses were on the horizon, he added.
"It's very critical," he said. "We're in dire straits."
Elias said that while Ottawa's Build Canada procurement policies have been helpful, he wants to see them extended to all taxpayer incentives for the building industry, including those at the provincial level.
